LPG cylinder subsidy by governments around the world has been phased out over time. This fact was confirmed by a self-reporting document submitted to parliament by the Indian government; specifically, Price List for Cylinder Subsidy for FY 2020-21 submitted by Union Minister of State for Petroleum and Natural Gas Rameswar Teli in Lok Sabha using Parliament records as reference.
According to Union Minister Rameswar Teli (Parliament), with times passed, all products have had their pricing based upon the current price of petrol; therefore, there should not be any more public requests to support the government’s pricing when it comes to anything related to LPG products. The government reported spending Rs 11,896 crore on LPG products in the Financial Year 2020-21 versus only Rs 242 Crores during FY 2021-22, giving the government savings of Rs 11,654 crore in the fiscal year due to LPG product price subsidies being removed.
In FY 2018, total Government Expenditure for LRPG was Rs 23,464 crore, and in FY 2019, this number grew to Rs 37,209 crore.
The subsidy pressure has reduced due to the increase in the price of gas cylinders
The Petroleum Minister said in Parliament that the price of petroleum production in the country has been linked to the world market. Despite this, the government is constantly emphasizing on keeping prices low to reduce consumer pressure. The main reason for the reduction in subsidy last year is the decrease in the number of beneficiaries and the increase in the retail price of gas cylinders.
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9.3 crore beneficiaries have decreased in two years
In June 2020, the government had said that only beneficiaries of the Pradhan Mantri Ujjwala Yojana will be given subsidy on gas cylinders. Since then, the number of people receiving the subsidy has decreased by 9.3 crore. During this time, the price of LPG cylinders has increased. Earlier this month, companies increased the price of cylinders by Rs 50, after which the price of LPG in Delhi increased by Rs 1053.
Prices have been increasing for two years
According to the data released by the Union Minister, the price of LPG cylinders in April 2019 was Rs 706.50, which decreased to Rs 581.5 in May 2020. Since then, the price of LPG cylinders has been increasing continuously. Although it decreased by only Rs 10 in April 2021, its price has almost doubled since then.
Currently, a subsidy of Rs 200 will be given per cylinder
The Petroleum Minister said that in the current financial year, the beneficiaries of the Ujjwala Yojana will be given a subsidy of Rs 200 per cylinder. This will be applicable for 12 cylinders in a year. After the beneficiaries purchase LPG cylinders at the market price, the subsidy amount will be directly transferred to their bank accounts.